Discover it Student Cash Back Review

Discover it Student Cash Back Review Summary

Discover it® Student Cash Back is a good option for students who want a $0 annual fee credit card with bonus cash back rewards. The Discover it® Student Cash Back offers 1 - 5% cash back on purchases, depending on the category, and Discover will double rewards earnings from the first year.

Discover it® Student Cash Back also has a sibling worth considering. The Discover it® Student chrome card is best for students whose top expense categories consistently include gas and restaurants. Discover it® Student chrome gives 2% back on the first $1,000 spent at gas stations and restaurants each quarter, along with 1% back on everything else. And it too will double your first-year rewards.

Either Discover it student card is a solid choice. The decision between the two really comes down to whether you’d prefer consistent rewards for gas and dining or higher earning potential in rotating bonus categories.

Discover it® Student Cash Back Highlights

Big-Time Bonuses

The Discover it Student Cash Back card offers 5% back (up to a quarterly maximum) in rotating bonus categories that require activation each quarter. Discover it Student chrome gives you 2% on your first $1,000 in gas and restaurant spending each quarter.

Those are pretty good deals in their own right, but they’re made infinitely more attractive by Discover’s offer to double your total first-year earnings. According to WalletHub calculations, this generous feature could be worth an extra $300 for Discover it Student Cash Back cardholders and $80 for Discover it Student chrome users, based on their $500 minimum credit lines.

$0 Annual Fee

Given that good, or even excellent, credit can be achieved for free by sustaining good financial behavior over time, there’s little reason to pay an annual fee if you can avoid it. This is especially true for people with limited credit, such as students, because a fee typically doesn’t give you too much additional value (e.g., better rewards or financing terms). Put differently, the cards will save you about $22, which is the average annual fee for current offers on the market, according to WalletHub’s latest Credit Card Landscape Report.

Market-Average Base Earning Rate

The average cash back credit card — across the whole market, including offers for people with good and average credit — yields roughly 1.12% of the amount spent. The cards offer 1% as their base earning rate, applicable to all purchases that don’t fit into quarterly bonus categories. That’s not too bad for a college student. But since most student cards offer similar rates, what really matters is how well the bonus categories complement your spending habits.

0% Intro APR On Purchases For The First 6 Months

College (and post-college) life can be quite expensive. So if you have any upcoming big-ticket expenses (e.g., a new laptop) that will take you a few months to pay off, this 0% intro rate could certainly come in handy. Just make sure to use a credit card calculator to avoid carrying a balance past the end of the promotional period and having to pay the card’s regular APR: 17.74% - 26.74% Variable. In addition, always pay at least the minimum amount by the due date to avoid late fees (Discover will forgive only your first late payment).

Unrestricted Rewards Redemption

You can redeem it card earnings whenever you’d like, with no minimum threshold amount required, and your earnings will never expire as long as your account is open and in good standing (i.e. no late payments, no fraudulent activity, etc.). This enables you to benefit whenever the mood strikes you, in sharp contrast to many other rewards credit cards that require, for instance, $25 in earned cash back before you can redeem.

Discover it® Student Cash Back Lowlights

High Regular APR

Your interest rate, or APR, is 17.74% - 26.74% Variable. For context, the market average APR for students is 18.18%, according to WalletHub’s latest Credit Card Landscape Report.

Relatively Few Merchants Accept Discover

Discover is one of four major credit-card networks. It is more widely accepted than American Express, but less so than Visa and Mastercard. So you should always have a backup payment method just in case. That or you could always check if your favorite stores accept Discover beforehand, but that would mean more homework for you.

Other Things To Consider About The Discover it® Student Cash Back Card

Rewards Never Expire

Many credit cards steal your unredeemed rewards if you don’t use your account for a certain period of time, and most apply a use-it-or-lose-it approach to account closing. But Discover it® Student Cash Back is a bit different. If you close your account or don’t use it for 18 consecutive months, your unredeemed rewards balance will be credited to you, either applying to an outstanding balance or being mailed in the form of a check.

No Foreign-Transaction Fee

The affinity of college students for international travel is cliché for a reason. And if you decide to live the stereotype on a spring break excursion or post-grad backpacking trip, you won’t get hit with a surcharge for foreign use. In fact, none of Discover’s credit cards have foreign-transaction fees. Just for your edification, the average foreign-transaction fee is currently 1.52%.

Initial Balance-Transfer Promo

If you open one of the cards and transfer a balance, the amount transferred will accrue interest at “only” a 10.99% rate for the first six months. It’s not the 0% intro rate that some other cards offer, but it is lower than the cards’ 17.74% - 26.74% Variable regular interest rate.

This deal also is accompanied by a 3% intro transfer fee (5% after), which is important to factor in to your calculations. For example, if you transfer a $500 balance from another credit card, you would pay a $15 transfer fee in addition to the interest it would accrue for each day that you don’t pay off the remaining balance.

User-Friendly Features

Neither it card has a penalty APR, a late fee for your first offense or an overlimit fee (assuming you opt in for the ability to spend above your limit — not recommended). Furthermore, if your card is ever lost or stolen, you can get a free overnight replacement. None of these features are exclusive to these two cards, and many might never actually come into play, but they’re nice nevertheless.

Discover it Student Cash Back vs. the Competition

Most major lenders are active in the student credit-card space, and competition is high for youthful applicants with years of above-average earning potential and financial needs ahead of them. In order to help you make the best choice for your wallet, we compared both student credit cards to some of the most popular alternatives in terms of six fundamentally important categories. You can check out the results below.